Interface Rehab To Pay $2 Million For Excessive Billing Practices

The federal government has succeeded yet again in bringing a fraudulent company to book. With thousands of organizations filing claims for Medicare and Medicaid over the past few years, several dubious companies have tried to game the system and failed.

The latest company to get clipped by the long arm of the law is Interface Rehab - a medical rehabilitation firm based out of Placentia, California.

Raising Services and Billing More

Late last week, the United States Department of Justice announced in a press release that it had reached a settlement agreement with Interface Rehab that will see the latter pay financial penalties for excessive billing practices.

According to the press release, Interface Rehab had intentionally submitted false claims to Medicare for rehabilitation services. The Department of Justice explained that the company had either submitted or caused the submission of false claims for unreasonable and unnecessary “Ultra High'' rehabilitation therapy levels. These claims covered most of the company’s Medicare Part A residents, all spanning 11 of its Skilled Nursing Facilities.

Interface Rehab had been doing this between January 2006 and October 2014, and its actions had gone unpunished. The Department of Justice also pointed out that the Interface Rehab case had been connected to another false claims case, which involved Longwood Management Corporation - an operator of nursing homes and care facilities based out of California.

In Longwood Management Corporation’s case (which was settled in July 2020), the company was accused of submitting false claims for rehabilitation therapy by increasing Medicare billings. With Medicare paying a daily rate for skilled nursing facilities, nurses who work with patients who have more complex needs will get more compensation from Medicare.

The highest level of Medicare reimbursement is for “Ultra High” therapy patients, who need at least 6 hours of skilled therapy from two disciplines five days a week. Longwood Management Corporation had intentionally submitted false claims to Medicare for these “Ultra High” rehabilitation levels. The company pressured therapists to increase the therapy provided to meet specific targets, so it could game the system.

Longwood was eventually charged with 27 nursing home facilities. The company was forced to pay $16.7 million to settle the case. Interface did pretty much the same thing, pressuring therapists to raise the amount of therapy they provided to patients in order to meet pre-set targets. This was also done without regard for the patients or their needs.

The Law Catches Up WIth Interface Rehab

Eventually, Keith Pennetti, a former Director of Rehabilitation at Interface Rehab, found out about the company’s crimes and filed a whistleblower report with the Department of Justice. The case was eventually sent to the U.S. Attorney’s Office for the Central District of California, which prosecuted in collaboration with the Civil Division’s Commercial Litigation Branch and its Fraud Section.

In total, Interface Rehab has agreed to pay a fine of $2 million. Keith Pennetti, on the other hand, is eligible to collect $360,000 on behalf of the United States. If there is any additional recovery in the case, Pennetti will be eligible for a cut as well.

The case’s resolution is another reminder of the efficacy of the False Claims Act. Signed into law by President Lincoln in 1863, the Act posits that whistleblowers can get rewards if they disclose fraud that directly affects the United States federal government. As long as their information results in a successful prosecution, whistleblowers can get between 15 and 30 percent of the proceeds collected.

The False Claims Act remains one of the strongest whistleblower laws in the United States. Providing a financial incentive ensures that people can be more aware of what is right and what isn't.

Speaking about the case, Brain M. Boynton, the Acting Assistant General for the Department of Justice, said:

“This settlement reflects our continuing efforts to protect patients and taxpayers by ensuring that the care provided to beneficiaries of government-funded health care programs is dictated by clinical needs, not a provider’s fiscal interests. Rehabilitation therapy companies provide important services to our vulnerable elderly population, but they will be held to account if they provide therapy services based on maximizing revenue rather than the interests of their patients.”

It is unclear whether Interface Rehab will need to submit to any other penalties and requirements. However, a fine should be more than sufficient to show that its acts weren’t in its best interests - or those of the public.


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

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